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Finance & Accounting
Pages 4 (1004 words)
1. Returns and Volatility for 2012 The monthly returns of Almarai Corporation and Anaam International are as follows: Both Almarai Co. Ltd. (or “Almarai) and Anaam International Holding Group Co. (or “Anaam) generated profits during the year 2012. However, only Almarai declared dividends for the year at SAR 1.25 per share; this represents returns of 0.020 or 2% on its market price…
The foregoing data are consistent with the following performance indicators which reflect that Almarai has achieved better profitability levels for the year 2012 as compared to Anaam: Of the two companies, Almarai provided better returns for its shareholders for the year 2012. The following tabulation shows the standard deviation of the two companies: Stock prices of Anaam for 2012 turned out to have higher standard deviation, which peaked in July 2012 at 7.297. Closing at SAR 36.02 in June 2012, Anaam shares went up by SAR 10.32 or 28.65% in July 2012 in response to the approval by the company’s General Assembly of the proposed capital increase which was seen to boost its liquidity and profitability. In comparison, Almarai’s equivalent figures deliver the highest point in March 2012 at 4.271. From its closing price of SAR 60.81 for February 2012, Almarai’s stock rose to SAR 65.84 at the end of March 2012. This may have been the market’s positive reaction to the news declared on 28 March 2012 regarding Almarai’s increased stake in one of its subsidiaries, Global Co. Anaam stock prices are more volatile and, therefore, bring in more risk compared to Almarai’s. Incidentally, the beta figures of the two companies – 0.64 for Almarai and 1.39 for Anaam – consistently reflect that Anaam has more price volatility. 2. ...
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